Another Milepost On The Road To Oblivion

We're screwed.

BP Plc said on Wednesday it was worried testing a new cap might further damage the broken Gulf of Mexico oil well and had not yet decided whether to proceed.

If you're just joining us, BP can't close the cap to contain the oil spilling because the government says BP has to test the cap first to make sure it won't explode from the pressure or damage the well.  The problem is now that BP says the act of testing the cap to see if the cap can contain the oil carries too much of a risk of causing something to explode.  Let that sink in.  Enjoy the rich palette of nuance there.

Perhaps maybe they should have, and I'm going to go out on a limb here, tested the cap first.

All of a sudden, BP does not want to close this cap.   Why is that?  Simple.

Somebody at BP paid attention to the fact that by containing the oil spill and deriving X number of barrels per day from the contained spill, it would basically reveal a exact measurable flow rate of oil and could subject BP to a much, much larger oil spill penalty than the current estimates, giving the legal forces arrayed against BP a nice big fat number to beat the company over the head with.  The last thing BP wants right now is people doing back of the napkin calculations at the dinner table and knowing exactly how much oil the company has crapped out into the ocean.  That would be game over for them.

At this point the exact figures could differ from the estimates by tens of thousands of barrels a day and millions of barrels over the extended spill period, which could mean tens of billions in additional EPA Clean Water Act fines and hundreds of billions in additional punitive damages.

So yes...BP is going to find some reason not to close this cap.  If they do, it's the end of the company as soon as they get the real barrels per day numbers.  They know this.  The Coast Guard knows this.  So BP "did everything they could" but the government won't let them contain the spill with the cap because it's "too risky".

Meanwhile, the company is praying the relief well is done before BP's 3rd quarter earnings numbers are out at the end of the month.   After all, if the relief well works, we'll never know how much oil was spilling, and BP can challenge any and every estimate in court.  Now, they can play for time while the oil keeps gushing.

So no, this cap will be deemed "too risky." You can absolutely count on that.